Lecture SlidesDixit and Skeath

Chapter 3

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Fig. 3.2

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Fig. 3.5

Possible Outcomes:

1) Player Doesn’t Contribute and Other Two Players Contribute: “4”

2) Player Contributes and One or Both of the Other Players Contribute: “3”

3) Player Doesn’t Contribute and One or None of the Other Players Contribute: “2”

4) Player Contributes but Neither of the Others Contribute: “1”

Fig. 3.6

StrategiesA “Strategy” specifies how you would move in all possible situations:

Emily has two: C, D

Nina has four: CC, CD, DC, DD

Talia has sixteen: CCCC, CCCD, CCDC, CCDD, CDCC, CDCD, CDDC, CDDD, DCCC, DCCD, DCDC, DCDD, DDCC, DDCD, DDDC, DDDD

Optimal Strategies

Optimal Strategies are those that a player would choose:

Talia: DCCD

Nina: DC

Emily: D

The “Equilibrium Path of Play” is the path that is followed when the players play their optimal strategies.

Order Advantage

First-mover Advantage:

Benefit from committing yourself to an action and forcing other players to adapt

Second-mover Advantage:

Benefit comes from having the flexibility to respond to the other player’s choices

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